In this article, David Emery explores the industry wide issue of “fake hits” tracks which, although they may amass a host of plays on platforms like SoundCloud, generate little to no appreciable revenue for artists or any label with which said artist may be associated.

I remember having a conversation with a manager a few years back. It wasn’t an easy meeting. Throughout he was leaning forward in his seat, rocking slightly back and forth, his dissatisfaction with the situation physically manifesting with every sentence.

We’d already talked about the problem at length, tried several different ways to try and change it, but still it remained and here we were. By this point he was not the only person in the room on edge.

“So explain this again,” his voice was raised, but not yet shouting “how we can be getting so many plays on SoundCloud, but we can only sell a handful of records?”

It was a fair question.

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One of the internet’s core strengths is its ability to create communities on a scale that were never possible before. People from around the world can loosely group together around a topic remarkably easily. What used to be a niche interest can suddenly be shared with millions of other people.

This has obviously had something of an impact on the music industry.

You could make a strong argument that Napster was the first music social network. Disparate music fans around the world connected together and shared what they loved. And what that was didn’t necessarily have any relation to what was traditionally deemed as popular. You could have millions upon millions of downloads of tracks and albums that hadn’t previously sold a fraction of that. Of course, you can’t compare free consumption to sales in that way, but we’ll get to that later.

The rise of MySpace is the next stop on this brief history lesson. It legitimised a lot of this behaviour, with the currency being fans rather then downloads, but the underlying concept being the same – global audiences of music fans coming together and engaging with an artist, forming a community, and accelerating the growth of that collective like a virus. Each artist suddenly is their own niche, with their own little corner of the internet full of their own fans. Tens of thousands, hundreds of thousands, millions of them.

Unlike what has gone before though, this global-hyper-engagement – these huge numbers – are a fundamentally different type of interaction then anything that existed before. Before, we had sales or nothing. Either you bought a record, a gig ticket, a t-shirt, or not. If you were an artist, there was no other way of someone communicating with you that they were a fan of your music, short of accosting you on the street and saying “I love your music, man! Didn’t buy your record, though.” Which, lets face it, is a shitty thing to do.

Mass level passive engagement on MySpace confused the hell out of a lot of people used to the way things once worked. “We’ve got millions of fans, we’ve made it!” They’d say, without being able to get a fraction of them to do anything other then comment on a blog post.

Fast forward to our SoundCloud problem at the start and you see this problem magnified and evolved. Not only does the ambient interaction of thousands of drive-by fans still continue, as it’s a dedicated music platform it does that whilst replacing previous ways that people used to listen to music. And not only that, it does that whilst creating a community of like-minded music fans that love certain types of music – mostly electronic and dance – meaning that the discovery and consumption happen in the same place, and that there’s no next step in the fans’ musical path.

You could have a hit on SoundCloud, have millions of plays, expose yourself to an audience bigger than any radio station or TV show, and it have precisely zero impact on the rest of your career and business. And, in the heyday of SoundCloud, you’d earn absolutely nothing from it.

Now this pattern of behaviour is going mainstream.

The burgeoning streaming services all are cultivating this kind of blended mix of engaged and passive audience. It would be unfair at this point, I think, to call them niches because they’ve grown past that. We talk about being in an echo chamber when it comes to modern news and politics, but the same is now true of music. Each service is their own bubble of curated tracks, successful artists and massive hits. Your perception of what is popular is warped by the service that you engage with.

These “fake hits” are fascinating because they are hits. They have millions upon millions of streams, coming from a huge global audience. And those streams equal a very significant revenue stream. For example, if you get on “Today’s Top Hits”, the biggest playlist on Spotify, you can expect to get at least a couple of hundred thousand streams a day – more if you’re near the top of the playlist – and that adds up to a decent amount of money if you do the math. From one playlist, on one platform.

But they’re still fake. Outside of the bubble, there seems to be very little resonance or connection. You can’t sell out shows based on big streaming numbers alone. These numbers represent attention and revenue, which is great, but the engagement is transitory, at least to the scale that the numbers would suggest. They’re the start of a fan’s journey with an artist rather then the end. The fans listening to tracks on Today’s Top Hits are listening to exactly that – they’re listening to the playlist, not the tracks. There’s nothing inherently wrong with this – in fact, quite the opposite, it’s an amazingly powerful new mode of music discovery. Where things come unstuck is where this new pattern of engagement – curation bubbles and echo chambers – slams into the traditional record industry.

After a slow start streaming has become fundamental to how tracks and artists are benchmarked. I’ve written before about how the industry loves to rank and order artists, albums and tracks, in an often-desperate attempt to try and understand what it is people actually like and are listening to. This used to be straightforward when everything was based on sales, but as the world shifted streams were – quite rightly – added to the mix.

If we look though at the way streaming services work, with their multitude of passive, lean-back playlists, and we compare that to the most engaged one-off action a fan could ever make – purchasing a track or album – we end up tying ourselves in knots.

You can see that in the way that the Official Charts Company in the UK has changed their metric for calculating how streams count towards the singles chart twice so far this year. That’s because the charts have ended up not really representing anything in their efforts to represent everything. They don’t represent music fans engaging with music, because they include a whole bunch of streams from playlists where people didn’t really engage that much.

Rather then tweaking the streams to sales formula, or come up with complicated rules about reducing that formula if a track has been on the chart a certain amount of time and isn’t growing, it would seem like it would make a lot more sense instead to just look at the engaged plays coming from streaming services. Take out the playlist and radio streams, and focus on the ones where the fan actually chose to listen to that track themselves.

If you got on a big playlist and that lead to lots of fans adding it their library and listening to it – great! That seems like a much more comparable behaviour to the traditional “sale” and also something of a lot more value to measure and compare.

That streaming services have created a genuine economy around the passive engagement of music that has been around since the drawn of the MP3 is something to be celebrated. But we still have a lot of learning to do about what it all actually means in the real world.